Graphene Manufacturing Group Ltd (TSX-V:GMG, OTC:GMGMF) said it has struck a binding deal with OzKem, the company which developed the THERMAL-XR coating system products, which used graphene produced by GMG.
The coating products improve heat transfer and reduce energy usage in air conditioning units.
When completed, it means GMG will own the manufacturing intellectual property (IP) and the THERMAL-XR brand. GMG will buy the base coatings product from OzKem and it will manufacture the THERMAL-XR products containing GMG graphene.
GMG is already an international distributor of THERMAL-XR products with a number of global commercial demonstrations underway or initial sales completed.
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"OzKem has been working with GMG since 2018. It was obvious to OzKem that the quality of graphene supplied by GMG could make a positive impact in our development of a conductive coating to restore lost efficiency in air conditioning units," said OzKem's managing director Terry Kobler.
"Since those early days, our partnership has grown significantly. It is a natural development in the business for GMG to take over the THERMAL XR business and work to develop the potential of this technology."
Meanwhile, GMG's CEO Craig Nicol added: "We are excited with this next stage of the commercial maturation of THERMAL-XR products.
"Together, with the partnerships already established, this is another important step towards GMG's goal to become a major global supplier of energy saving products as well as G+AI Batteries as we continue to de-risk the commercial scale up of these technologies."
Under the agreement, GMG will buy exclusively from OzKem the base coating at agreed prices for five years. OzKem agrees not to develop graphene-based coatings for the same fixed period.
GMG will also pay OzKem an initial A$1 million cash and a subsequent A$1 million in shares, conditional on a successful commercial batch blend of the THERMAL XR product completed by GMG.
Graphene Manufacturing Group has developed a proprietary production process to decompose natural gas (methane) into its elements, carbon (as graphene), hydrogen and some residual hydrocarbon gases.
This process produces high quality, low cost, scalable, 'tuneable' and low/no contaminant graphene suitable for use in clean technology and other applications.
Contact the author at giles@proactiveinvestors.com